RII: A New Index for Assessing Internationalization of Chinese Currency

The diversified reform of the international currency system in the post-financial crisis era brought opportunities for the Internationalization of Chinese currency RMB. The year 2011 has seen a huge progress in the trade settlement and international financial transaction of RMB. However, an objective evaluation of the improvement in RMB internationalization is still difficult. Different from the index of the proportion of international reserve currency, this essay is to analyze the internationalization based on the pricing, trading and reserve functions of international currency. The innovation of this essay lies in the compilation principles of RII and the construction of index system. RII stood at 0.45 in 2011, indicating its preliminary recognition from the international community. But there is still great gap in the internationalization between RMB and other major currencies like US dollars, Euro. [PUBLICATION ABSTRACT]